Stock Manipulation
Stock manipulation: Odyssey Technologies

Odyssey’s stock price has shot up 1443% in a little over a year. Where is SEBI?

 

Odyssey Technologies claims to operate in the information security industry with a focus on public key infrastructure (PKI) for payment systems in India. The company’s latest annual report mentions that its main customers are from the banking & finance sector and the rest include government and defence agencies. Around 70% of Odyssey’s revenue reportedly derived from product-related services and a little less than 28% comes from product licences implementing PKI. But Odyssey has recorded sales of only Rs1 crore-Rs2 crore each quarter since March 2011. However, such is the ease with which manipulators operate in the market that, in about a year, the company’s share price shot up by 1,443%, or 15 times, to Rs39.05 on 9 December 2014 from Rs2.53 on 8 October 2013. To put it in perspective, an investment of Rs1 lakh would now be worth approximately Rs15 lakh. In as many as 128 of the past 270 trading days, the stock has closed with a gain of 2% or more. As usual, this will go unnoticed by the regulators.

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SEBI proposes new norms for issuance, listing of municipal bonds

According to SEBI, municipal bonds would add to instruments where provident funds, pension funds and insurance companies can also invest

 

Market regulator Securities and Exchange Board of India (SEBI) Tuesday proposed a new set of norms for listing and trading of municipal bonds on stock exchanges to channelize household investments for urban infrastructure development. This would also help government in its 'smart cities' programme.

 

Issuing draft regulations for such municipal bonds, also known as 'muni bonds', SEBI said that that issuing authorities would need to contribute at least 20% of the total project cost for which they wish to raise funds.

 

Besides, these municipal authorities would need to have a strong financial track-record and such bonds should have a minimum tenure of three years.

 

"Conservative Indian investor mainly invests in fixed deposits, small saving schemes or gold. Bonds issued by municipalities having good financial track record would be an good alternative investment opportunity for such conservative investors, as it provides reasonable return with less risk, which in turn may accelerate the capital markets," SEBI said.

 

Commonly known as 'muni bonds', these investment products are very popular among investors in many developed nations, especially the US, where muni bonds have attracted investments totalling over $500 billion and are among preferred avenues for household savings.

 

The market regulator has invited comments on the SEBI (Issue and Listing of Debt Securities by Municipality) Regulations, 2015, till 30th January.

 

Further, the capital market regulator said that municipal bonds would add to instruments where provident funds, pension funds and insurance companies can put in their money.

 

While such bonds have been issued by various municipal authorities in the country, the total funds raised through them stand at only about Rs1,353 crore.

 

The Bangalore Municipal Corp was the first municipal corporation to issue a municipal bond of Rs125 crore with a state guarantee in 1997.

 

However, the access to capital market commenced in January 1998, when the Ahmedabad Municipal Corp (AMC) issued the first municipal bonds in the country without state government guarantee for financing infrastructure projects in the city. AMC raised Rs100 crore through its public issue.

 

Among others, Hyderabad, Nashik, Visakhapatnam, Chennai and Nagpur municipal authorities have issued such bonds, however, there is no provision as yet for listing and subsequent trading of muni bonds on stock exchanges in India.

 

As per guidelines of the Urban Development Ministry, only bonds carrying interest rate up to maximum 8% per annum shall be eligible for being notified as tax-free bonds.

 

However, SEBI's Corporate Bonds and Securitisation Advisory Committee is of the view that having a fixed rate of 8% might not attract investors.

 

There can be "flexibility in setting interest rate cap by linking it to a benchmark market rate," the concept paper said.

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Nifty, Sensex still trapped in a narrow range – Tuesday closing report

Nifty will move higher if it closes above 8,280

 

We had mentioned in Monday’s closing report that a close below 8,215 will increase the chances of a decline. The Indian benchmark opened Tuesday higher and moved in a narrow range. However, it just managed to keep itself above the level of 8,215.


The S&P BSE Sensex opened at 27,478 while NSE’s CNX Nifty opened at 8,260. Sensex moved in the range of 27,312 and 27,478 while Nifty moved between 8,221 and 8,268.

 

Sensex closed at 27,404 (up 8 points or 0.03%) and Nifty closed at 8,248 (up 2 points or 0.02%). NSE recorded a volume of 65.08 crore shares. India VIX rose 1.92% to close at 14.8625.


The Indian cabinet Monday gave an approval to the Land Acquisition Act through the ordinance route for amendments. The government said that urgency of the land acquisition ordinance was because under Section 105 of the Act, 13 pieces of legislation including the Atomic Energy Act 1962, Railways Act 1989, National Highways Act 1956, and Metro Railways (Construction of Works) Act, 1978 needed clarity on which provisions of the Act applies to them. In addition, their exclusion deadline ends on 1 January 2015.


The Indian economy is better placed than it was six months ago because of slowing inflation, political stability and a lower current account deficit, but the banking sector remains subdued because of weak demand for credit and pressure on asset quality, the Reserve Bank of India (RBI) said in its bi-annual Financial Stability Report (FSR).


Coming back to stock markets, Adani Ports (7.70%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today. BEML (7.15%) was among the top two gainers of the group. The stock rose on the news of changes in Land Acquisition Act that will help infrastructure companies. In other news, Singareni Collieries Company Ltd purchased a ten cubic metre shovel from BEML for Rs12 crore.


PMC Fincorp (4.97%) and Rasoya Proteins (4.93%) continued to be among the top losers in the ‘A’ group on the BSE.


BHEL (1.51%) was the top gainer in the Sensex 30 pack. It has joined hands with Midhani and HSL to set up a consortium that will build submarines indigenously and bid for a Navy project.


Hero MotoCorp (2.09%) was the top loser in the Sensex 30 stock.

US indices closed Monday flat. Except for Jakarta Composite (0.94%) all the other Asian indices closed in the red. Nikkei 225 (1.57%) was the top loser.    


European indices were trading in the red. US Futures were trading marginally lower.
Disappointing inflation data from Spain and growing concerns over political tensions in Greece affected market sentiments.

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